Basics of Property Tax in the United States

Property tax acts as a source of revenue for most local governments in the United States and elsewhere around the globe. In most cases, this tax is usually levied on personal property and real estate. It’s also the responsibility of the owner to file property tax, and failure can lead to heavy fines. As a property owner, you can decide to hire an external firm that will handle all your tax activities including filing appeals for tax reliefs, ensuring public records are accurate and taking care of your property tax assessment. The value of a property is determined by local government officials, and property owners have the liberty to dispute this valuation. The major shortcoming of property tax for the property owner is that their income is not fixed while the tax liability is fixed. To avoid exploitation by local authorities, some states in the USA have imposed a limit on the amount that a taxpayer can pay for his property.

Basics of Property Tax
The good thing about hiring a firm to take care of your property tax is that firms understand the law especially considering that rules may vary from one jurisdiction to the other. Also, remember that one property may be subject to taxation by several jurisdictions. Other than the local government, a property may be subjected to taxation by counties, special taxing authorities, utility district, school districts, and cities. In most cases, the states have formulated a plan of how these utilities should coordinate taxation to avoid conflicts of interests.

Property to be Taxed and Tax Rates
Like mentioned earlier, property tax is imposed on buildings, land, and fixtures. This includes business premises, farms, homes and real estate. However, a property that belongs to charitable organizations, schools, and religious organizations cannot be taxed under property tax. In most places, property tax is usually classified into different categories such blighted real property, vacant, industrial, commercial and real estate.

More about Property Tax
Other than the nature of the property, there are other factors that determine property tax imposed on a property such as the size of the property, location of the property and nature of the property. Other factors include restrictions imposed on the property such as physical restrictions, building code restrictions and easements. General economic conditions, the desirability of the property as well as nature of the improvements to be done on a property are other factors used to determine the tax to be imposed on a property in the United States.

Appeal against Property Tax
Property owners are given two ways of protesting the value of their property. Some of the commonly used mechanisms include a levy of tax and the judicial appeal. According to most state laws, all jurisdictions must allow the owner to contest the evaluation in a court of law. However, like mentioned earlier, this may vary from one state to the other. The federal government in the United States reported that all tax exemptions in the year 2009 resulted in an amount of $32 billion. Methods of payments also differ from one jurisdiction to the other.